EMEA Private Business Attractiveness Index

In what circumstances do family businesses operate particularly successfully? And what turns a good location into an excellent one? The ‘EMEA Private Business Attractiveness Index’ gets to the bottom of these questions. The latest and third edition examines the attractiveness of 33 EMEA countries as business locations, based on 64 criteria in nine categories. The index ranks countries according to their tax and regulatory regime, access to skilled workers and talent, sustainability behaviour, public health, education, technology and infrastructure as well as their start-up ecosystem.

A pioneering barometer

The ‘EMEA Private Business Attractiveness Index’ is used by family entrepreneurs, executives from the private and public sectors as well as policymakers as an indicator of their country’s attractiveness as a location for family businesses. It identifies potential for improvement that can be utilised to make the entire economy more dynamic. In Switzerland in particular, whose economy is largely driven by family businesses and SMEs, the EMEA’s attractiveness index can act as an objective benchmark and barometer for pioneering decisions.

Optimising more than gross domestic product (GDP)

In the face of ongoing macroeconomic uncertainty, traditional indicators like GDP growth no longer offer a full picture of a thriving private business environment. Financial metrics are only part of the equation. Countries need to look beyond pure growth in order to fortify resilient infrastructure, foster a thriving start-up landscape with varied funding paths, commit to clear Net Zero objectives, ensure workplace equality and strengthen their public governance processes. It’s clear that private (family) businesses choose their countries of domicile not merely on the basis of their financial strength but also because of their commitment to universal growth.

In the overall ranking across all categories, Switzerland is the undisputed leader, followed by Sweden and Germany (see Figure 1). With a score of 73.1, it exceeded its record from the previous year by 1.2 index points. Switzerland’s political and economic players seem to be shaping and harmonising the key factors in such a way that they form a lasting fertile environment for growth and progress.

Tax and regulatory environment

Switzerland also ranks second in the ‘Tax and regulatory environment’ category. Swiss family-owned companies are familiar with implementing new or amended regulatory provisions. Some even see it as an opportunity to improve. However, this always becomes particularly difficult when there’s uncertainty about the development or implementation of regulatory changes. With the implementation of the OECD’s corporate income tax and other regulatory adjustments, Switzerland has aligned itself with international standards and optimised its regulatory framework. On the one hand, finishing second in this category indicates that a consistently high level of planning security is very important in uncertain times. On the other hand, it shows that efforts to increase attractiveness based solely on low corporate taxes clearly fall short of what’s required.

Best conditions for entrepreneurship

The ‘Private business landscape’, ‘Start-up ecosystem’ and ‘Technology and infrastructure’ categories have the strongest positive impact on a country’s overall ranking and therefore on its attractiveness as a business location. It’s therefore no coincidence that Switzerland leads the ‘Private business landscape’ category and is followed by the same competitors as in the overall ranking, namely Sweden and Germany. This category covers the large private companies that operate in the country, the dynamics of trading activities and the level of foreign direct investment. The top-ranking countries in this category have a proven track record of promoting, building and sustaining vibrant entrepreneurship. 

Expertise: the number one commodity

The shortage of skilled workers has become one of the greatest business challenges of our time. Therefore, it’s encouraging that Switzerland also occupies the leading position in the ‘Education, skills and talent’ category. In most Swiss family-owned businesses, expertise and talent are considered by far the most important commodity. Recruiting the right people, developing their expertise through reskilling and upskilling and leading them effectively are key for business success. In the Swiss edition of the ‘27th Global Annual CEO Survey’, 52% of the CEOs questioned regard securing the next generation of managers as their second most difficult HR task after talent retention.

A fertile breeding ground for start-ups

Switzerland ranks second in the ‘Start-up ecosystem’ category. This may come as a surprise, as the country is home to many traditional and generational companies. Today, one does not exclude the other. Key figures, such as the number of start-ups, the number of founders, the number of unicorns, the innovation index and the success rate of start-up investments come into play in this category. This consideration therefore goes hand in hand with the innovative strength of a country – something that in Switzerland has proven to be world class. It’s not without reason that the World Intellectual Property Organisation (WIPO) has once again named Switzerland the most innovative country in the world in the ‘Global Innovation Index 2023’.